E-Payments To The Last Mile

The global prepaid airtime and digital economy continues to grow fuelled by the estimated 3.5 billion unbanked people in the world who do not have a bank account. 2.7 billion people live in a cash-based economy, yet they all have a phone. Less than 25% of people in Africa have bank accounts, and even fewer have credit cards. 1 Informal retail and cash purchases are the norm in the region, but they bring associated risk and cost. Retailers in emerging markets, whether formal or informal, require tools that aid quick, safe and reliable transactions. Despite its size, the vibrant and underserved informal sector tends to be an afterthought in the development of new payment devices and solutions.

This context presented a unique opportunity to create new technologies to serve the specific needs of informal trade in emerging markets. The predominant method for distributing prepaid airtime is through scratch cards transported physically by road or foot to retailers for onward sale to customers. With the proliferation of prepaid airtime service providers and increasing demand for small denominations of airtime (meaning more scratch cards need to be sold to generate the same amount of revenue), the management of an ever-growing inventory of stock was becoming increasingly problematic and profit margins of scratch cards were decreasing for retailers as a result.

There is a US$60 billion prepaid airtime market, and that’s just prepaid airtime in Africa alone. By some estimates, by 2015 there is going to be $85 billion of prepaid airtime floating about.

We all thought that PINS (called Vouchers by many) were for calling cards or topping up prepaid mobile phones. And with the slow death of calling cards, and other ways to airtime top up prepaid mobiles, surely this would lead to the decline of the Prepaid PIN.

Yet, the reality is no – we are seeing huge demand from financial services institutions who realise that the digital world lacks a very basic capability – how do you enable a consumer who has real cash use this cash to access digital services? For instance, pay real cash into a digital wallet or to pay an online merchant for goods and services.

So, simple Use Case. A consumer in Canada wants to buy goods from a web merchant. The consumer goes to a Canada Post outlet, buys a Ukash voucher (which has a 19 digit PIN) via the Ezipin Canada service and then redeems the voucher at the payment page of the merchant. During the redemption process, the merchant’s website will communicate with Ukash, confirm that the voucher has not been previously redeemed and then give good value to the consumer. site name generator . So, cash at the retailer becomes electronic currency via a prepaid airtime PIN.

So, where is Movotek playing in this? We have recently enabled a number of new service providers to generate PINS, manage warehouses of PINS, redeem PINS and distribute PINS via electronic distributors.